You don't have to feel guilty about every purchase you make. Learn how to spend confidently.

I was recently sitting down with a new client who shared with me that they never know what they can afford. By afford, I don’t mean that they’re spending more than they earn. They’re not. They spend less than they make and save money each month. But are they saving enough? Can they afford to take a vacation this year? Or should that money be going into a retirement plan or their kids 529 plans?

Many Americans live paycheck to paycheck and drown in credit card debt. I’m not speaking to those folks. I’m talking to those that are spending responsibly and saving for the future. They do so to the point that they feel sick about spending money on things now that could bring themselves or their families a lot of joy. This particular young family hadn’t been on a vacation that their parents hadn’t paid for in 3 years because they feared what they were saving wasn’t enough and that they’d never be able to accumulate enough to retire.

You don’t have to regret every dollar you spend. To combat this ugly doubt, you need to a plan! Don’t simply save an arbitrary amount of your paycheck and live blindly, hoping someday it will accumulate to an ample amount. Instead, take some time to calculate what your money could grow to by a date you think you hope to reach financial independence and see if it will cover your lifestyle. When you’re in your 30’s, I know it can be difficult to predict when you might retire or how fast your money will grow. Whether your work with a financial planner or create your own calculations, you should create a projection that will at the very least give you an idea whether you’re in the ballpark. Without any idea, though, it’s like leaving the harbor without a map or compass.

We know with certainty that projections won’t be correct when you look out several decades, but they give you a sense of direction. It’s the exercise that’s important. You’d be surprised at what an increase of 2% to your savings can amount to over 30 years, but you won’t know whether you need to make adjustments like these until you run the numbers!

For this family, some relatively minor adjustments showed them that they are heading in the right direction. We increased contributions to their retirement plan by $50/week. The change won’t be a significant drag on their life today, but will allow them more flexibility at some point in the future. The biggest impact, however, is that they now feel more confident that they can spend some of their income on things their young family can enjoy today. Financial planning isn’t about accumulating the most money to leave behind the day you die; it’s about using your resources to get the most out of life today and in the future.

You don’t have to regret every purchase you make. You just need to have a plan so you can spend confidently. Take a vacation without worrying that you’ll never reach financial independence.